International Standards Suggest Pensions Should be 40% of Salaries; We Are Far From That, Says Galstyan

The government will increase the amount of pensions and benefits starting July 1. Specifically, the minimum pension will rise from 31,600 drams to 36,000 drams. This was announced today, June 30, by Anahit Galstyan, head of the Pension Security and Other Monetary Payments Department of the Ministry of Labor and Social Affairs of the Republic of Armenia, during a press conference.

"This means that pensions for pensioners with nearly up to 14 years of service will amount to 36,000 drams. The basic pension amount has also increased from 21,000 drams to 24,000 drams. This means that practically all working pensions will increase by at least 3,000 drams. For those pensioners who were receiving the minimum pension, their amount will rise by 4,400 drams," she stated.

According to her, when a person’s pension is not enough to meet their basic living needs, there will naturally be comparisons and complaints. "On the other hand, we need to understand that a pension is not a salary; it is an insurance system. This means you work, you make contributions, and when the time comes that you no longer work, you receive compensation provided that you have made contributions that entitle you to a pension. No country has a pension equal to the salary. There exists the concept of a compensation coefficient, which is calculated as the ratio of the pension to the average salary. It reflects how much I earned until the age of 63 and how much I will receive when I retire. According to international standards, in the case of an average work experience of 33 years, the compensation coefficient should be 40 percent. We are currently far from that 40 percent. This has compelled us to introduce a cumulative system that will help citizens receive a more dignified pension, as they directly participate in forming the amount of their pension," she pointed out.

Previously, we reported that it became known how much pensions and benefits will increase starting July 1.